Report: Sequestration and Obamacare Pushing Up Layoffs
“It is important to remember that while it is critical for government spending to be reduced in order to shrink the nation’s deficit, these cutbacks do not occur in a vacuum. They have real-world consequences that ripple throughout the economy. So, the push to cut federal spending, while absolutely necessary, is going to impact jobs both inside and outside of the government. We are seeing it in health care, education, and aerospace and defense,” John Challenger said in a Thursday report from the global outplacement consultancy firm Challenger, Gray & Christmas.
March’s across-the-board spending cuts to the federal budget — known as the sequester — was expected to be “a slow grind that will intensify with each passing day,” according to President Obama. “Every time we get a piece of economic news over the next month, the next two months, the next six months,” he said at a press conference in March, “as long as the sequester is in place, we will know that economic news could have been better if Congress hadn’t failed to act.”
At the time, economists assessed the damage at 750,000 lost jobs, and at least half a percentage point missing from national growth statistics. In July, when reports of job cuts began emerging from government agencies like the Department of Defense and the Census Bureau, Congressional Budget Office Director Douglas W. Elmendorf wrote that if the sequester were canceled, it would boost employment between 300,000 and 1.6 million in the 2014 fiscal year.